Monday, 6 February 2012

What a STRONG jobs report! STI gunning for 3000, Dow for 12900! (continue)

Dear Friends,

10 months back in April, Mr Hu Li Yang, Asia's Leading Investment Guru, mentioned that 12,938 is the resistance Dow Jones will face. After Dow Jones hit the high point of 12,876 on 2 May 2011, it begins its fall.

Last Friday, after the announcement of the Jobs reports, it close at a high of 12,862. Stocks took off after the Labor Department reported the addition of
243,000 jobs in January, better than estimates of 121,000 quoted in Marketwatch. The
unemployment rate fell to 8.3%, the lowest since February 2009, which is also better than the estimates of 8.5%.

Dow Jones is back to where it was in May. Unbelievable! To think that just 4 months back, a lot of us are still worried of a bear market coming.

As Mr Hu Li Yang explains in November, "This is just a correction in a Bull market. A bear market never comes when everybody is anticipating it. Bear market occurs when we least expect it. It ALWAYS attacks when we are rejoicing, spending and borrowing money." In October last year, I remember interviewing a few corporate bosses. They agreed that they were not thinking about expanding or borrowing too much money in 2012. They knew Europe would be bad. They were PREPARED to face it!

And Mr Hu Li Yang says "If we are prepared for a crisis, it will never occur". Having been in Wallstreet as Merrill Lynch vice president, he has seen it all. Mr Hu Li Yang mentions "When interest rates is kept at 0%, such panics will occur again. And when it happens, please don't panic. It is the best opportunity to BUY." However most of the investors do the opposite. We always buy when market is good and sell when everybody panics. Let this Europe crisis be one lesson for us.

Having said that, how is the market now? What should we do in February?

Although the Jobs numbers are excellent, do remember thatthe market is overbought now. It shows in our market sentiment indicator. If you would like to know about our market sentiment indicator, please visit our website at www.danielloh.com. We encourage everybody to be cautious when entering position. We expect a small correction coming, mid of February to Early March.Do not be worried about it, as it also signifies a good time to buy.

Keep a watch on STI at 3000, and Dow Jones at 12,938. Mr Hu Li Yang mentions a real breakout only occurs when it is above that point for 3 days!

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